UMVA has learned that the federal government is taking a drastic step to mitigate the impact of a contentious plan to regulate and tax foreign streaming platforms, a move that could trigger a massive price spike for Canadian consumers.
The government is directing Canada's broadcast regulator to review its plan, which was sparked by a May 21 decision requiring streaming giants such as Spotify and Netflix to spend some of their Canadian-sourced revenue to acquire or produce Canadian programming.
Canada's Identity and Culture Minister made the announcement, citing concerns that the new requirements would impose costs on streaming companies that could ultimately fall on Canadian consumers through higher prices, at a time when Canadians are already facing cost-of-living pressure.
The move is a reaction to the Canadian Radio-television and Telecommunications Commissions' (CRTC) ruling that non-Canadian streaming platforms making over $25 million in annual revenue from Canadian customers would face a 15% Canadian Programming Expenditure (CPE) requirement - a significant increase from the original 5%.
Sources have confirmed to UMVA that the situation has been closely watched by the US, which views Canada's Online Streaming Act as a barrier to trade rather than a means to preserve Canadian culture, adding another layer of complexity to the ongoing trade tensions between the two nations.
The CRTC's decision has sparked a court challenge led by a prominent lobby group representing major movie studios and streaming platforms in Canada, which argues that the Online Streaming Act violates a key trade agreement.
In a significant shift, the government has announced a cabinet directive to issue $600 million in funding to support and stabilize Canadian production, rather than relying on streaming giants to fund Canadian content.
UMVA can exclusively reveal that the government will also develop a new four-point policy directive aimed at smoothing the act's rough edges, including keeping streaming platforms affordable, protecting consumer choice, and ensuring flexibility and new government investments to support Canadian stories, local news, and underrepresented voices.
The additional federal investments will ensure Canadian creators, producers, and broadcasters receive the financial support they need, with further details to be announced after consultation with the sector, and a focus on supporting French-language productions.
